A recent report from the British analyst house Butler Group argued that economic prosperity in the 20th century owed its origin to one overriding development: the introduction of self-service in almost every area of our life. While self-service technology is now widely taken for granted, it has transformed the way business operates.
Both the supplier and the customer stand to gain from a self-service initiative. For the consumer the ability to transact in a way where timing, method, and manner are all under the user's control is very attractive--particularly if it saves the consumer time and effort. For the supplier, it means offloading all the administrative costs of selling to the consumer while giving a better service, thus improving customer retention.
The Internet has further transformed business and is perhaps the ultimate form of self-service. Indeed, it could be argued that self-service is the killer application of the Internet. For example, Internet banking saves time and hassle for the consumer; until recently, even the simplest transactions would require a visit to the bank. Now it can all be done online in an instant. Any company, large or small, that does not capitalize on the opportunities that the Internet presents is likely to lose out to more dynamic competitors.
As head of global marketing and business development strategy for Netonomy, I see the trend toward Web-enabled customer service daily. The case of mobile telephone self-service is a classic win-win example. While customers can avoid call center queues, the operator also stands to gain immensely from the self-service approach.
As the mobile phone industry prepares to roll out the next generation of services, self-service is increasingly being seen as a significant part of the technological jigsaw. Mobile self-service has evolved from finding out information on the Web or from IVR systems, to the mobile portal concept. The customer can now activate or turn off mobile data services, check free minutes, view a bill, order a new handset, and download games or ring tones, all without having to call a customer service representative. Mobile customers will soon be analyzing their bills on mobile handsets and changing their rate plans themselves. In this way, not only does self-service become an alternative channel, but also for many it is the primary channel in the customer/vendor relationship.

France's Bouygues Telecom has seen the benefits of self-service a million times over. Of the company's 3 million monthly customer interactions, 1 million take place online, three in 10 of those over a portable device. Gartner estimates that the average Web-based interaction costs $1.15, compared to the $6 to $12 per interaction that a call center fielded inquiry costs--this adds up to potential savings of millions of dollars each month, not to mention the benefits in terms of customer satisfaction and the data Bouygues obtains through the self-service portal directly.
Self-service has evolved. No longer is it simply a channel for businesses to sell or deliver products and services, it now allows us to choose and define the products we want to buy and to be supported the way we want to be supported. Businesses can ask not what their customers can do for them, but what they can do for their customers.
Historically, operators have known little more than the customer's telephone number, calling habits, and address (and then only for monthly subscribers). Self-service enables operators to gather profiling data, such as interests and hobbies, so customers can be targeted with personalized services to suit their lifestyle. Looking forward, the next generation of self-service will go beyond the detailed personalization of existing services and start to enable customers to actually create their own lifestyle products. The service provider will own an infinite product portfolio, developed, managed, and marketed by its customers through sophisticated self-service technology.
It is hard to believe how we coped in the days before self-service. You don't need to turn the clock far back to see how retailing has changed, and indeed how our expectations have changed. We, as consumers, are demanding more and more. We are now looking for companies to serve us the way we want to be served and to sell us the products that we want to buy. The next generation of self-service will deliver the ultimate in market feedback--we won't just tell vendors what we want, we will take it.
About the Author
John Hughes, founder and executive vice president, marketing and business development for Netonomy, is responsible for the company's global marketing and business development strategy. He has a decade of marketing and product management experience in the areas of new media/Internet and application server technology. Before founding Netonomy Hughes held senior roles at Business Objects and Oracle Corp. John holds an MBA in international business from the American University, and a BA in economics from the University of Richmond.